What is the purpose of ethical investing?

The purpose of ethical investing is to choose investments based on moral guidelines. This approach goes beyond traditional financial metrics by incorporating environmental, social, and governance (ESG) factors into investment decisions. Investors who practice ethical investing seek to align their investment choices with their personal values or societal standards. This means they may prioritize companies that have positive social impacts, adhere to sustainable practices, or demonstrate ethical governance.

By applying a moral framework, ethical investors aim to contribute to societal well-being while still seeking to achieve financial returns. This dual focus distinguishes ethical investing from other investment strategies that may solely focus on maximizing profits without regard for the ethical implications of their choices. Thus, selecting investments based on moral guidelines is central to the practice of ethical investing.